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order to control and to see to it that only those necessarily entitled must be provided exemptions, the constitution require
that such grant of tax exemption shall be concurred by the vote of the majority of the membership in the Congress. It should
be noted that Philippines is on a bicameral congress, the senate and the lower house, thus, granting tax exemptions are not
quite easy to legislate.
i. Non-impairment of the jurisdiction of the Supreme Court on tax cases. This is in furtherance of the principles of
check and balances. The jurisdiction of the lower courts are based on the mercy of the laws passed for the purpose, thus,
may be modified and revised from time to time. However, in the case of the Supreme Court, no law can take its power to
become the final arbiter of tax cases.
j. Veto power of the President in tax bills. Generally, on bills passed by Congress, the President is empowered to either
approve or disapprove a bill as a whole. If approved or not acted upon within a certain period of time, it becomes a law, and
if vetoed, it does not become a law in its entirety. Tax bills however, can be granted either fully or partially. If a bill is granted
partially, provisions which are approved becomes part of the law while those provisions vetoed upon becomes ineffective.
Constitutional limitations are those provided for in the constitution or implied from its
provisions, while inherent limitations are restrictions to the power to tax attached to its
nature.
The following are the inherent limitations.
1. Purpose. Taxes may be levied only for public purpose;
2. Territoriality. The State may tax persons and properties under its jurisdiction;
3. International Comity. the property of a foreign State may not be taxed by another.
4. Exemption. Government agencies performing governmental functions are exempt from
taxation
5. Non-delegation. The power to tax being legislative in nature may not be delegated.
(subject to exceptions)
Constitutional limitations.
1. Observance of due process of law and equal protection of the laws. (sec, 1, Art. 3) Any
deprivation of life , liberty or property is with due process if it is done under the
authority of a valid law and after compliance with fair and reasonable methods or
procedure prescribed. The power to tax, can be exercised only for a constitutionally valid
public purpose and the subject of taxation must be within the taxing jurisdiction of the
state. The government may not utilize any form of assessment or review which is
arbitrary, unjust and which denies the taxpayer a fair opportunity to assert his rights
before a competent tribunal. All persons subject to legislation shall be treated alike
under like circumstances and conditions, both in the privileges conferred in liabilities
imposed. Persons and properties to be taxed shall be group, and all the same class shall
be subject to the same rate and the tax shall be administered impartially upon them.
2. Rule of uniformity and equity in taxation (sec 28(1)Art VI) All taxable articles or
properties of the same class shall be taxed at the same rate. Uniformity implies equality
in burden not in amount. Equity requires that the apportionment of the tax burden be
more or less just in the light of the taxpayers ability to bear the tax burden.
3. No imprisonment for non-payment of poll tax (sec. 20, Art III) A person cannot be
imprisoned for non-payment of community tax, but may be imprisoned for other
violations of the community tax law, such as falsification of the community tax
certificate, or for failure to pay other taxes.
4. Non-impairment of obligations and contracts, sec 10, Art III . the obligation of a contract
is impaired when its terms and conditions are changed by law or by a party without the
consent of the other, thereby weakening the position or the rights of the latter. IF a tax
exemption granted by law and of the nature of a contract between the taxpayer and the
government is revoked by a later taxing law, the said law shall not be valid, because it
will impair the obligation of contract.
5. Prohibition against infringement of religious freedom Sec 5, Art III, it has been said that
the constitutional guarantee of the free exercise and enjoyment of religious profession
and worship, which carries the right to disseminate religious belief and information, is
violated by the imposition of a license fee on the distribution and sale of bibles and other
religious literatures not for profit by a non-stock, non-profit religious corporation.
6. Prohibition against appropriations for religious purposes, sec 29, (2) Art. VI, Congress
cannot appropriate funds for a private purpose, or for the benefit of any priest, preacher
or minister or for the support of any sect, church except when such priest, preacher, is
assigned to the armed forces or to any penal institutions, orphanage or leprosarium.
7. exemption of all revenues and assets of non-stock, non-profit educational institutions
used actually, directly, and exclusively for educational purposes from income, property
and donors taxes and custom duties (sec. 4 (3 and 4) art. XIV.
8. Concurrence by a majority of all members of Congress in the passage of a law granting
reverse, modify or affirm on appeal or certiorari, final judgments and orders of lower
courts in all cases involving the legality of any tax, impost, assessment or any penalty
imposed in the relation thereto.